School Budget Problems Have Deep Roots in Philadelphia

District's problems seen as chronic

For the second year in a row, the public schools here face the possibility of hundreds of layoffs, larger class sizes, and fewer programs.

The problem for the Philadelphia district is revenue, or a lack thereof, according to Superintendent William R. Hite, who described what has amounted to an annual cycle of deep budget cuts as "immoral."

Urban school districts, to be sure, have had their share of financial challenges, but Philadelphia's case appears to be far more acute and intractable, a confluence of politics and money, ability, and means.

"At the root of the issue is a lack of consistent long-term financial support from the state," said Michael Casserly, the executive director of the Council of the Great City Schools, a Washington-based advocacy group for large urban districts. He described Philadelphia as "the most underresourced urban school district in the nation."

"For decades now, the state has very poorly funded the school district, and the chickens have now come home to roost," he added.Jonathan A. Supovitz, the director of the Consortium for Policy Research in Education, or CPRE, at the University of Pennsylvania, agreed that the city has lost some influence with lawmakers in Harrisburg, the state capital.

"Historically, Philadelphia has been inefficient," Mr. Supovitz said, "and increasingly the legislature has been dominated by nonurban forces that have been reluctant to put more money into what has been seen as an ineffective system."

Confluence of Costs

While the problem has historical roots, it is sustained by the district's inability to levy taxes; the increasing cost to the district of charter schools, which are expected to enroll 71,927 students by the 2014-15 school year and now account for 30.7 percent of the budget; and, more recently, a rise in debt-service payments, which now claim 11 percent of the district's budget. The district is also still reeling from statewide education cuts in 2011 of almost $1 billion, which coincided with the end of the federal economic-stimulus aid that it had relied on to cover some operating costs.

Philadelphia's financing problem mirrors that of other districts in a state without a statewide funding formula and where districts rely year to year on the whims and political calculations of legislators for a portion of their funds.

But the effects may be magnified here because of the district's size—nearly 132,000 students are in district-run schools—and a largely disadvantaged student body whose needs often require additional resources, said Michael Churchill, a staff lawyer at the Public Interest Law Center of Pennsylvania.

If there is no legislative action leading to a more transparent and consistent funding formula, the legal-advocacy group may sue the state, he said, for what it believes to be a violation of the state's constitutional mandate for a "thorough and efficient" education for its students.

"This [crisis] is not arising because the district is spending its money wastefully," Mr. Churchill said. "This is arising because the basic cost of education has been rising and the funding has not. You can't continue to try to bring those in line by cutting your way out of the problem, because you've reached the point where you can no longer provide the services that are required, and because it's a prescription for disaster for students."

Last year, Philadelphia's financial woes were catapulted into the national spotlight as the district laid off more than 3,000 workers and closed two dozen schools in an effort to come to terms with a $304 million budget deficit. Mr. Hite threatened that he would not open school in September without an additional $50 million. Even so, schools opened with greatly diminished capacity, in some cases, without full-time guidance counselors, assistant principals, lunch aides, and librarians.

Deficits Remain

Though no school closures have been forecast as part of this year's budget, the future is no less bleak. The $2.49 billion budget plan released last month includes a $216 million deficit—about $120 million of which the district hopes would come from raising the city's sales tax.

To pay for additional programs—extracurricular activities, Advanced Placement courses, and early-childhood-literacy programs—Mr. Hite is requesting an additional $320 million. Of that amount, $150 million would come from the state, $75 million from the city, and $95 million in savings from the district's unions.

"No other agency in the commonwealth of Pennsylvania has closed the number of facilities we've closed, reduced its workforce by the thousands that we have reduced our workforce, had two concessionary labor contracts—not one, but two—and borrowed $300 million two years ago, and we're still facing a $216 million deficit," Mr. Hite said last week, after a budget hearing in which the spending plan was roundly panned.

Mr. Hite and the School Reform Commission, the five-member board that has overseen the school system since a 2001 state takeover, are asking Philadelphians to lobby the city council, the governor's office, and the legislature for more money. Whether they succeed is yet to be seen.

Neither Tim Eller, a spokesman for the state education department, nor Jay Pagni, a spokesman for Gov. TomCorbett, replied to requests for comment last week. But in comments to the Philadelphia Inquirer, Mr. Pagni said that it was "past time" for the city council and teachers' union to support the district as the state had.

Pointing Fingers

City Council President Darrell L. Clarke would like any money raised from the extension of the sales tax to be split between the city—to cover unfunded pension obligations—and the school district's requests. In addition, Mr. Clarke wants any future financial help to the district to be contingent on creation of an independent oversight body to focus on its finances.

A spokeswoman for Mr. Clarke said he remained "deeply concerned" about the district's financial instability and noted that the council has raised taxes and additional revenue over the years to make up for state funding cuts.

"Council President Clarke continues to seek long-term, sustainable funding for all Pennsylvania public schools that includes restoration of a fair funding formula and reimbursements for charter school costs," Mr. Clarke's spokeswoman, Jane Roh, said in an email.

It's also unclear what concessions might come from the Philadelphia Federation of Teachers. Jerry Jordan, the president of the American Federation of Teachers affiliate, said the district has not said what portion of the $95 million in savings from its employee unions it expects to come from the teachers' union.

But he said teachers were already contributing their share: They have worked for three years without a salary increase and routinely dip into their pockets to pay for classroom supplies.

Mr. Jordan also blamed the state for the financial crisis, saying that it was the state's duty—not the union's—to fund the schools under the Pennsylvania Constitution.

For their part, advocates and parents have been lobbying local and state officials to stave off the cuts.

At the first of a series of district budget hearings last week, a few speakers called for abolishing the reform commission. And some believe that with Gov. Corbett, a Republican, facing re-election in November, this might be the year that something changes in the way local schools are financed.

If not, the long-term consequences could be dire.

"We just can't have more layoffs, [and] skeletal school structures," said Susan Gobreski, the executive director of Education Voters Pennsylvania, a nonprofit that advocates for sound education policies. "It's too important to the community's health and economic well-being to have good public schools that are authentically available to every person in every neighborhood in the city," she added.

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